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Sunday, November 27, 2011

I've posted a few essays on this subject, and hope to wrap it up this time 'round. Let's start by saying that I won't address the individual abuses of police or the Occupiers. So tazing, pepper spray, pissing in the bushes and violent anti-Semite hate rhetoric are all off the table. Just because someone else did something else that's wrong doesn't automatically validate your unrelated philosophical argument. So these topics are duly and summarily rejected. On with the show.

Likewise they're fond of Marx, who advocated "from each according to his ability; to each according to his need [or, alternatively, "contribution"]," though often filtered through other "progressive thinkers".

The problem here is that all of these thinkers... Marx, Rousseau -- even Adam Smith, who is often quoted (and mis-quoted) by conservatives -- are mired in the economic realities of their time, which are long obsolete. To use them in the present climate is exactly analogous to asking Sir Isaac Newton to explain quantum flux. For instance, in Rousseau's time the near entirety of the tax burden was shouldered by commoners... the "third estate"... as the "first estate" (the nobility) an the "second estate" (the clergy) had exempted themselves. Today we have no nobility, their economic successors shoulder the vast majority of the taxes in the USA.

One of the biggest differences between then and now is that "money" is no longer chained to a physical standard. We used to be on the "gold standard", meaning that each dollar bill printed represented a quantity of physical gold store in a vault (officially it means that the price of gold is fixed, but by that interpretation it necessarily follows that when you've run out of gold to buy, your money is worthless). "Money" no longer means that. It is now a pure concept of worth. It is an idea that measures the value of ideas. Here I'll use a graph from the xkcd comic in a way they may not agree with.. We couldn't go back to a gold standard even if we wanted to. The total value of all the gold ever mined in the history of mankind is a little over 9 trillion dollars. The public debt of the United States alone is now more than that. The public debt of the European Union is even higher. The only way to get back on the gold standard is to value each ounce of gold so highly as to make instant billionaires of those that have even moderate amounts. But gold has utilitiarian value in electronics and jewelry, which would be cost-prohibitive should we do that. A return to the gold standard would immediately devastate those industries. Money is no longer physical, nor is it possible to be made so without using a currency so common as to make a mockery of its use as money.

In past essays I've mentioned a couple of other things that have changed. Productivity, for example, used to be a measure of labor. That time is also long past. Automation and data processing have made it possible for one person to be, for all practical purposes, infinitely productive. Really. As an example, once you've written a book it is possible to "print" it to a PDF file. That PDF can be copied infinitely without further effort. There is no publisher, no distribution house, no need for central access, no measurable cost. Anyone having the book can make more of it. Divorced of the physical medium the product -- a book -- can be universally accessible. The traditional concepts of supply and demand would tell you that it's worthless. Yet we have evolved the concept of "intellectual property" to hold on to that monetary value. Intellectual property is a concept designed to apply the concept of monetary value to concepts in general. The world has become a very foreign place to 18th century thinkers.

In the world of the 18th century, you made your livelihood by making things. You either owned the means of production (i.e. the factories or shops) or you provided the labor to those who did. And since it was very difficult and expensive to set up shop, then the vast majority of people had no choice but to provide labor. That is, most people had no choice other than to get a job. And, since the world was a much smaller place, once you got a job, you held on to it for life, as jobs didn't grow on trees.

We've all seen graphs like this one...

Figure 1

...as well as other graphs that show even larger gaps of "inequality" by comparing "apples to meat pies"... corporate profits vs. worker take-home salaries, for example. While automation and outsourcing makes many such graphs meaningless, this particular graph does show that the "income gap" has been increasing.

Now take a look at the gross domestic product for the US since data automation was invented and applied:

I hold that we have fewer domestic production-line workers, and that this accounts in large part for the inequality. It is possible for corporate workers to share in that increased profitability through profit-sharing and stock investments, but these aren't exercised by nearly as many people as could.

Competition from foreign labor (such as that which killed our local textile mills) also means that we don't need as many domestic factory workers as we used to. By "need" I mean that our workers aren't cost-competitive. For one thing, looking at these graphs with an envious eye, you naturally want a bigger piece of the pie... a higher wage. Meanwhile, a Chinese worker is just happy to get paid. If you're the one buying the labor, you're going to buy what makes economic sense to you, just as when buying eggs at the grocery store, most people will look for the bargain rather than fulfilling some perceived or imposed social obligation to local farmers. So the Chinese laborers get the work, as devastating as may it be to the company in the long run. In the end, we are the ones giving preference to the low cost goods at Wal-mart. We cannot seriously point the finger at corporations for giving us exactly what we demanded.

Take another look at Figure 1. All those trend lines are apples-to-apples, and in real dollars, everyone's income has increased. The occupiers argue that the poor get poorer, which is patently untrue. So they argue that the lower percentage hasn't increased enough... it's an argument based on pure envy. They want a slice of the pie, even when they don't own the pie at all. Neither have they contributed to the increased profit through labor provided by automation and outsourcing. Nevertheless, the graph provides an incentive and justification for the envious non-owners to tax part of the pie away from the owners, when they could just has readily have invested in ownership themselves through common stock. They decry bailouts for others, yet demand them for themselves. I'm singularly unimpressed.

What people have not realized is that there is a "New World Order", and it is not something that is planned, it is something that is organic and is already here. The reason we are no longer on a gold standard is not because fat cats have horded wealth. It's because wealth has grown exponentially with automation, outsourcing, and our new ability to be infinitely productive. These have reduced the domestic requirement for semi-skilled labor.

The problem is that the people on the streets are holding to 18th century thoughts about economy in the 21st century. Remember, in the 18th century you had to get a job. Today, anyone with an eBay account can become a shopkeeper. Anyone with a skill can market it. Anyone with an idea can exploit it. There is no physical standard requiring that we get our wealth from an outside source. This is not a zero-sum game. If you haven't noticed it, every trend line in Figure 1 has gone up. This is not a case where one segment grows at the expense of another. Not only does the pie grow, but you can make your own pie. The moment that people stop looking for jobs and start looking for work, then they have grown the economy, and there is literally no limit to how far or fast it can grow when everybody is contributing. But I cannot stress this enough... it is not necessary for you to eat crumbs from anybody else's table. It is not necessary for you to envy someone for what he has when you have the opportunity to make your own destiny. The answer to the people who are standing in the streets is to stop standing in the fucking streets and do something productive. Not all of them have to become entrepreneurs; but it doesn't take many to provide employment for the rest.

You literally have equal opportunity right now. Many of you don't know it because you've been flatly lied to by Socialists who would keep you mired in an 18th century mindset. But be aware: equal opportunity is not equal results. It never will be if it's to be truly fair. It is up to each of you as an individual to make the most of your own life, and you're never going to get anywhere by losing focus on your life and your opportunities to shout "hey, that's not fair!" at someone else's good fortune.

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Hopefully this will be my final post on the subject, as I'm quite tired of the Occupiers. Everything they've done... every position they've taken... has been fueled by envy and ignorance. I have very little patience for either. Look at their slogan: "We are the 99%." It's bullshit. Hell, if they were the 99% I'd be with them. I'm neither rich nor powerful. These are the small percentage of the 99% who'd rather sit on their asses and live for free on the largess of others. These are the would-be kept pets, the whining, ignorant sock puppets for the 1% of would-be socialist organizers, and I have no interest whatsoever in being one of them.